Personality and
liability

"And it is great reason that a Hospital in expectancy or
intendment, or nomination, shall be sufficient to support the name
of an Incorporation, when the Corporation itself is onely in
abstracto, and resteth onely in intendment and consideration of the
Law; for a Corporation aggregate of many is invisible, immortal,
& resteth only in intendment and consideration of the Law; and
therefore in 39 H. 6. 13b. 14 a. Dean and Chapter cannot have
predecessor nor successor. 21 E. 4. 27. & 30 E. 3. 15. 6. They
may not commit treason, nor be outlawed, nor excommunicate, for
they have no souls, neither can they appear in person, but by
Attorney33 H. 8. Br. Fealty. A Corporation aggregate of many cannot
do fealty, for an invisible body cannot be in person, nor can
swear, Plow. Com. 213, and The Lord Berkley’s Case 245, it is not
subject to imbecilities, or death of the natural, body, and divers
other cases."

"Mr. Price argued that, in effect, there are two separate sets
of persons in whom authority to activate the company itself
resides. Quoting the well known passages from Viscount Haldane L.C.
in Lennard's
Carrying Co Ltd v Asiatic Petroleum Co Ltd [1915] A.C.
705, he submitted that the company as such was only a juristic
figment of the imagination, lacking both a body to be kicked and a
soul to be damned."[2]

"My Lords, a corporation is an abstraction. It has no mind of
its own any more than it has a body of its own; its active and
directing will must consequently be sought in the person of
somebody who is really the directing mind and will of the
corporation, the very ego and centre of the personality of the
corporation."

Bolton v Graham & Sons Limited, per Lord
Denning,

"A company may in many ways be likened to a human body. It has a
brain and nerve centre which controls what it does. It also has
hands which hold the tools and act in accordance with directions
from the centre... (the) directors and managers represent the
directing mind and will of the company and control what it does.
The state of mind of these managers is the state of mind of the
company and is treated by the law as such."

"money which is not theirs but the company’s, if they are
spending it for the purposes which are reasonably incidental to the
carrying on of the business of the company. That is the general
doctrine. Bona fides cannot be the sole test, otherwise you might
have a lunatic conducting the affairs of the company, and paying
away its money with both hands in a manner perfectly bona fide yet
perfectly irrational… It is for the directors to judge, provided it
is a matter which is reasonably incidental to the carrying on of
the business of the company… The law does not say that there are to
be no cakes and ale, but there are to be no cakes and ale except
such as are required for the benefit of the company."

"A corporate body can only act by agents, and it is, of course,
the duty of those agents so to act as best to promote the interests
of the corporation whose affairs they are conducting. Such agents
have duties to discharge of a fiduciary nature towards their
principal. And it is a rule of universal application that no one,
having such duties to discharge, shall be allowed to enter into
engagements in which he has, or can have, a personal interest
conflicting or which possibly may conflict, with the interests of
those whom he is bound to protect... So strictly is this principle
adhered to that no question is allowed to be raised as to the
fairness or unfairness of the contract entered into..."

Companies Act 2006, Parts 26
(ss.895-901) and Part 27 (special rules for public companies), on
arrangements, reconstructions, mergers (or amalgamations) or
divisions (demerger or
"scission"). The rules here implement the Third and Sixth EC
Company law directives.

Companies Act 2006, Part 28, on takeovers. s.979 gives a
takeover bidder who has already acquired 90% of a company's shares
the right to compulsorily buy out the remaining shareholders (squeeze out).
Conversely s.983 allows minority shareholders to insist their
stakes are bought out. The Panel on Takeovers and
Mergers, established in 1968, oversees Companies Act duties,
including those laid down in the European Directive on Takeover
Bids (2004/25/EC)

Notes

^
n.b. Lord Haldane never used such figurative words. They may trace
back to Lord Chancellor
Thurlow (1731–1806), who is said to have asked rhetorically,
"did you ever expect a corporation to have a conscience, when it
has no soul to be damned and no body to be kicked?" Though it seems
his exact phrase was, "Corporations have neither bodies to be
punished, nor souls to be condemned; they therefore do as they
like." John Poynder Literary Extracts (1844) vol. 1, p. 2 or
268